On March 10, 2021, Congress passed the American Rescue Plan Act of 2021 (“ARP Act”), a $1.9 trillion stimulus bill to help speed up the recovery of the struggling United States economy that resulted from COVID-19. President Biden signed the bill the following day.
The ARP Act was first introduced by Representative John Yarmuth, a Democrat from Kentucky. It was then considered by the House Budget Committee and later passed by the U.S. House of Representatives on February 27, 2021. The Senate passed a modified version of the original bill on March 6, 2021 and then on March 10, 2021, the House passed the final version of the bill. President Biden signed the bill into law on March 11, 2021, just before certain COVID-19 aid programs expired.
Most importantly for the general public, the ARP Act provides $1,400 stimulus payments for individuals making under $75,000, tax-free student loan forgiveness, and expanded federal unemployment insurance. The ARP Act also earmarks over $300 billion for state and local governments, over $100 billion toward the reopening of schools, and almost $100 billion for further COVID-19 testing and vaccinations.
Employers may also be interested to know that the ARP Act has extended the tax credits available to businesses with fewer than 500 employees under the Families First Coronavirus Response Act (“FFCRA”) through September 30, 2021 thanks in part to former President Donald Trump, who signed a pandemic relief package into law on December 27, 2020. The pandemic relief package did not require employers to provide paid FFCRA leave after January 1, 2021, but instead allowed covered employers who voluntarily offered such leave to utilize payroll credits to cover the costs of benefits paid to employees through the end of March 2021. The ARP Act signed by President Biden simply extended this period an additional six months until September 2021.
Interestingly, the ARP Act adds two qualifying reasons for leave under the FFCRA: (i) obtaining an immunization related to COVID-19 or recovering from any injury, disability, illness or condition related to such immunization; or (ii) seeking or awaiting the results of a diagnostic test for, or a medical diagnosis of, COVID-19, when such employee has been exposed to COVID-19 or the employer has requested such test or diagnosis. The ARP Act also provides an additional 10 days of emergency paid sick leave under the FFCRA for those employees who already exhausted their sick leave prior to March 31, 2021. Lastly, the ARP Act also adds two additional weeks of eligible paid family leave, bringing the total family leave allowed from 10 weeks to 12 weeks, and simultaneously increased the total amount of wages eligible for an employer tax credit as a result of providing paid family leave from $10,000 to $12,000.
The additional leave is good news for retail businesses who may be planning to or have already resumed operations. The additional 10 days of sick leave will help keep employees on the payroll without providing an undue hardship on the employer. Once businesses are fully able to resume operations, there shouldn’t be a last-minute scramble to find healthy and willing workers to fill what may have been an empty employee roster. Second, with many schools pushing to reopen, a surge in the virus could lead to forced closures. Without the additional two weeks of paid family leave, retail establishments would be at the mercy of school and state officials in the event retail employees were forced to remain at home with their children due to further school closures.
One thing to be careful for- large retail employers who are not subject to the FFCRA, but still provide leave, could be subject to a retaliation claim if the employer takes action against an employee who believes they are exercising a “right” under the FFCRA. Even though the “right” is more of a privilege for individuals employed by businesses with more than 500 employees, there have not been any court decisions deciding whether or not a claim for retaliation under the FFCRA can lie where no substantive right exists under the FFCRA. Additionally, it is likely that savvy Plaintiffs’ attorneys will add a claim for retaliation under the Family and Medical Leave Act (“FMLA”). While a court would most likely reject a claim for retaliation without any substantive right acting to act as a foundation, the time and cost spent in litigation to get to that point would certainly be expansive. Please stay tuned for additional updates relating to the American Rescue Plan and the Families First Coronavirus Response Act that employers must know in order to stay compliant in the ever changing world of labor and employment law with the Biden administration.
You can access this article written by GM associate, Graham Newsome, by clicking HERE.